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View Full Version : Rare Earths a STRATEGIC commodity: LYC to be first new producer in 2011


Sparty
12-06-2010, 01:00 AM
Back in June this year JP Morgan in June initiated coverage on Lynas Corporation (ASX: LYC) with an overweight rating and a $0.91 Jun 11 price target.

LYC's price is now almost 6 months later is much higher and is $1.585 (Dec 6 th 2010). This makes JP Morgan's latest announcement of an "overwieght" with a 35% increase to come even more interesting.

From Australian-Shares.com/forums: "JPMorgan has upgraded Lynas to "overweight" from "neutral" and increased its 12-month share price target to $2.17 from $1.71." Dec 2010

So J P Morgan's call in June -2010 whilst bullish seems to have markedly underestimated where LYC was going. Of course J P Morgan could not have known that China would play some games with REE exports that may have been in response to a political situation with Japan.

But the world is now on notice that the Rare Earths and in particular the heavy REEs are a strategic commodity... as recently amplified with the associated commentary surrounding the USGS 2010 report (http://www.australianrareearths.com/Known-REEs-resources-reserves) into the rare earths that highlighted the USA's military's dependence on the REEs and the panicked rush to secure supplies that has been generated since. Even K Rudd has declared an interest with a much questioned commitment to supply Japan with REEs. (http://www.australian-shares.com/forums/discussion/6291/rudd-to-nationalise-australia-s-rare-earth-elements/#Item_1)

As Lynas Corp is the only realistic new ex-China supplier of both the light and heavy REEs in 2011 we can probably expect LYC to once again well outperform J P Morgan's target.

One well respected Australian broker has a $3 short term $6 longer term target.